Gold Market Trading Value Up 74% Year-on-Year... Individuals Hold the Largest Share

The Korea Exchange announced on the 3rd that the trading value of the gold market as of the end of last month exceeded 74% of the entire scale of the previous year. In particular, individual investors accounted for the highest proportion of transactions.

Korea Exchange, Yeouido, Seoul. Photo by Jinhyung Kang aymsdream@

The gold price in the Korea Exchange gold market recently reached a new high due to a sharp rise in exchange rates and overheated safe asset investment sentiment, rising 47% from 86,940 KRW per gram (g) at the beginning of the year to 127,590 KRW at the end of last month.

The average daily trading value last month was 23.2 billion KRW, an increase of 344% compared to the beginning of the year. During the same period, the average daily trading volume was 187 kg (kilograms), up 211%.

By investor type, individuals accounted for the largest share at 43%, followed by institutions (37%) and physical businesses (19%). In particular, the number of gold trading accounts opened by individuals at the 13 securities firms that are members of the gold market exceeded 1.2 million as of the end of June.

Meanwhile, at the Shanghai Gold Exchange, a representative gold spot market outside the Korea Exchange, the price of the Au99.99 item at the end of last month rose 31% compared to the beginning of the year. The average daily trading volume during the same period decreased by 47%. Also, at the Istanbul Exchange, the price of the USD/ons item at the end of last month rose 37% compared to the beginning of the year. The average daily trading volume during the same period decreased by 20%.

The Exchange analyzed that the rise in gold prices continued due to various global economic uncertainties such as the expansion of geopolitical risks and the visible prospect of interest rate cuts by the U.S. Federal Reserve (Fed). Furthermore, the increase in safe asset demand was stimulated by escalating Middle East conflicts and the prolonged war in Ukraine, and investment inflows into the gold market increased as a hedge against the dollar decline amid the Fed’s interest rate cut cycle that began in the second half of the year.

An official from the Exchange said, "With the continued preference for safe assets and the strengthening status of gold, participation in the KRX gold market, a major investment destination, is steadily increasing," adding, "The Korea Exchange plans to ensure that gold trading is conducted transparently and fairly while strengthening communication with market participants such as financial investment firms, precious metals businesses, and general investors to actively resolve any difficulties encountered during trading."